Crypto Exchange BitMEX Fined $100 Million for Anti-Money-Laundering Failures — WSJ

By David SmagallaCryptocurrency exchange BitMEX was fined $100 million for failing to maintain an adequate anti-money-laundering and know-your-customer program.The fine imposed on BitMEX on Wednesday was lower than the $417 million prosecutors argued for late last year.The company, which in July pleaded guilty to one count of violating the Bank Secrecy Act, was also sentenced to two years' probation at a hearing Wednesday in federal court in Manhattan.Prosecutors said that BitMEX flouted rules that required them to put systems in place to prevent money laundering while knowingly doing business with U.S.-based customers.BitMEX, in a blog post Wednesday, called the Bank Secrecy Act charge "old news" and said that while it was disappointed with the financial penalty, the amount was substantially less than what the Justice Department was initially seeking. It added that it has been working on improvements to its user verification, know-your-customer and anti-money-laundering programs, and that these efforts were being made even before the initial charges were levied.BitMEX entered into settlements with U.S. regulators over related conduct in 2021, agreeing to pay $100 million. In 2022, its three founders pleaded guilty to U.S. criminal charges and each agreed to a $10 million fine.The Seychelles-incorporated exchange took on U.S. clients to boost its revenue but didn't obey U.S. laws designed to prevent the misuse of the financial system, prosecutors said.BitMEX ostensibly withdrew from the U.S. in 2015 but put in place toothless mechanisms to keep U.S. residents from accessing it while executives touted the exchange at conferences in the U.S., according to prosecutors.Prosecutors added that BitMEX acquired a Hong Kong-based business the exchange used as a pass-through for U.S.-dollar transactions, lying about its true purpose to an unnamed Hong Kong-based bank."Today's sentence sends a clear message that companies that willfully violate these rules and refuse to implement AML/KYC programs will face consequences," said U.S. Attorney Matthew Podolsky.Write to David Smagalla at [email protected]